Virgin, Delta deal faces more turbulence
AUCKLAND – Air New Zealand has joined Tiger Airways in opposing Virgin Blue’s tie-up with US carrier Delta Air Lines on the Australia-US route.
Air New Zealand says it will contest what it has described as collusion on fares and capacity.
Virgin and Delta, the world’s largest airline, unveiled plans two weeks ago to form a revenue-sharing agreement under which a steering committee would manage the carrier’s aircraft on the trans-Pacific route.
But Air NZ’s general counsel, John Blair, said the proposed joint venture would be anti-competitive and most of the benefits the two airlines had outlined in their regulatory filings could be achieved through arrangements such as code sharing.
Air NZ’s opposition comes after the Singapore Airlines-backed Tiger Airways declared it will lodge objections to the joint venture with regulators.
The Australian Competition and Consumer Commission last year rejected plans for a “co-operation agreement” between Air NZ and Air Canada on the Sydney-Vancouver route.
Blair said Delta and Virgin had separately entered the trans-Pacific market, trumpeting lower fares, yet were now complaining about the ability of their competitors to force them out of the market if they “are not allowed to collude on prices and capacity”.
Delta began flights between Sydney and Los Angeles on July 3, four months after Virgin’s long-haul carrier, V Australia, commenced services across the Pacific.
This report complied from several news sources, including the Sydney Morning Herald
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